Cabot withdraws 2020 earnings guidance

BOSTON—Cabot Corp. has withdrawn its financial guidance for fiscal year 2020, and is reducing planned capital expenditures in response to COVID-19 pandemic.

Despite a "solid" second quarter, ending March 31, Cabot said it is withdrawing the outlook as future demand for the company's products remain uncertain.

In addition, in order to maximize free cash flow, Cabot is looking to reduce previous plans for capital spending, according to CEO and President Sean Keohane.

The company said it would update its 2020 outlook when it has more visibility into demand.

Cabot expects to deliver strong results for the three months to end of March, despite an adverse COVID-19 impact on sales volumes in China. The company has linked the performance to "strong demand" outside China in January, February and early March.

In terms of measures taken against COVID-19, Cabot said it was following local regulations and guidance issued by relevant authorities. The company has restricted global travel, allowed remote work wherever possible, and restricted access to its facilities to critical personnel only.

Cabot said it continues to supply its customers around the world and has contingency plans in place to respond to the needs of our customers.

"I remain confident that the underlying fundamentals of our businesses are strong," Keohane said in a statement. "However, we are taking swift action to better align our cost structure and working capital needs to the near-term demand patterns."

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